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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

History of US-India Relations

Indian Prime Minister Narendra Modi's decision to skip the upcoming Non-Aligned Summit in Venezuela sends a powerful signal of his Hindu Nationalist government's growing commitment to India's partnership with the United States.

The latest logistics deal allowing the US forces to use Indian military bases is an indication of how the Americans intend to play the India card against China after the Cold War, just as they played the China card against the Soviet Union during the Cold War.

The US-India deal is part of the US “pivot” to Asia designed to check rising China. The U.S. Navy plans to deploy 60 percent of its surface ships in Asia in the near future. Instead of having to build facilities virtually from the ground up, as in Afghanistan and Iraq, the U.S. has the benefit of simple arrangements for the tremendous Indian facilities, according to Forbes magazine. This deal will accelerate the unfolding post Col-War realignment taking place in South Asia.

Massive Western Aid to India:

US-India ties are not new. India has been the number one recipient of US aid since 1947, according to the US government data. The country India's first Prime Minister turned to for help during the 1962 China-India war was also the United States.

India has received $65.1 billion in US aid since its independence, making it the top recipient of American economic assistance. Pakistan, with its $44.4 billion, is at number 5 on the list. US data also shows that Pakistan is not among top 10 for military or total economic and military aid.

More recently, the US aid to India has been replaced by massive US investment in the country that keeps its economy afloat. Massive western money inflows help India, with its huge trade deficits, pay for its imports and help maintain significant foreign exchange reserves. U.S. investment in India has jumped 500% in the past two years, according to the Wall Street Journal.

US Help in 1962 Indo-China War:

Indian Prime Minister Nehru sought significant US material aid and diplomatic help as the Indian troops were in full retreat in the 1962 China-India war. A former US intelligence official Bruce Riedel in his book "JFK’s Forgotten Crisis: Tibet, the CIA and the Sino-Indian War" notes that President John F. Kennedy played a “decisive role” in “forestalling a Pakistani attack” on India, even as
Islamabad then was fully capable of going to war with India to wrest the disputed territory of Kashmir.

India's Pakistan Obsession:

The US efforts to partner with India are clearly aimed to check China's rise. However, India's actions and statements suggest that it expects to use this partnership to against Pakistan.

Anticipating questions about US-Pakistan ties during his India visit, here's what Carter told Council of Foreign Relation in Washington D.C. before leaving for New Delhi:

“I’m sure I’ll be asked about it in India, but I think the first thing one needs to say from an American policy point of view, these (India and Pakistan) are both respected partners and friends.”

"Pakistan is an important security partner", Carter added.

Pakistan-China Ties:

While US is courting India to check China's rise, the China-Pakistan ties have now moved well beyond “higher than Himalayas and sweeter than honey,” as officials on both sides say. Chinese strategists openly talk of Pakistan as their nation’s only real ally. And China is investing heavily in Pakistan to build the Gwadar deep sea port as part of a much more ambitious and strategic China-Pakistan Economic Corridor (CPEC) that India is attempting sabotage.

The result is that Pakistan is drawing closer to China, a rising superpower, while its rival India is partnering with the United States, a superpower in relative decline on the world stage.

“One of the most important puzzles of India-Pakistan relations is not why the smaller Pakistan feels encircled and threatened, but why the larger India does. It would seem that India, seven times more populous than Pakistan and five times its size, and which defeated Pakistan in 1971, would feel more secure. This has not been the case and Pakistan remains deeply embedded in Indian thinking. There are historical, strategic, ideological, and domestic reasons why Pakistan remains the central obsession of much of the Indian strategic community, just as India remains Pakistan’s.”

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Pakistan Air Force Chief of Staff had fruitful talks in Moscow in July on purchasing of Russian Su-35 fighter jets.

MOSCOW (Sputnik) — Chief of Air Staff of the Pakistan Air Force Sohail Aman had "fruitful talks" in Moscow in July on purchasing of Russian Su-35 (NATO reporting name: Flanker-E) fighter jets, Pakistani Ambassador to Russia Qazi Khalilullah told Sputnik. "Chief of Air Staff Marshal Sohail Aman had fruitful talks with the Russian partners on this issue in July," Khalilullah said answering a question on whether Islamabad could purchase the Su-35 aircraft. According to the official, the Pakistani Air Force "is considering different options of deepening cooperation with Russia."

BOOK EXCERPT "The Nation Declassified" Five declassified secrets reveal India’s moves with global superpowers during the Cold WarA new book examines files no longer classified as top secret.

The Nation Declassified reveals the secret history of how India’s Prime Ministers, their closest advisers, diplomats, intelligence agencies and military led the nation through the transformation of world order in the cold war era. Uncovering thousands of pages of top secret declassified documentation from the Prime Minister’s Office, the Ministry of External Affairs, the Department of Atomic Energy, the Atomic Energy Commission, the Joint Intelligence Committee, the Cabinet Secretariat R&AW Reports, supplemented with extensive interviews, the book provides a glimpse of the functioning of the Indian state in protecting its interests during the Cold War.

President Kennedy, US and KashmirTT Krishnamachari, Minister in the Jawaharlal Nehru Cabinet met with President Kennedy after 1962 Sino-Indian conflict. TTK conveyed to JFK that India cannot take ad-hoc decision on Kashmir as this would not be acceptable to the Indian people. TTK also states that in talks with Ayub prior to the 1962 conflict, in course of the third round “we were prepared to alter the international boundary”. (Tape, 1963) He added that “personally, I am prepared to go even further”. (Tape, 1963)

In 1964, Ambassador Chester Bowles XE "Chester Bowles" met TN Kaul in Moscow XE "Moscow" and spoke of his visit to Kashmir and placed a “proposal” to the Indian Envoy on Kashmir presumably, as a result of the US Envoy’s discussion with Sheikh Abdullah. According to Bowles, Sheikh Abdullah’s participation in elections of 1965 XE "1965" on basis of Kashmir’s accession to India could be secured if India provided special status to the Valley. TN Kaul did not comment or respond to the proposal. (MEA, India-Pakistan-USA Relations, 1963.)

Nehru-Ayub Khan TalksPM Nehru wrote in a “Note” from Cabinet Secretariat dated 21 October 1960 when President Ayub told him that he “wanted to talk to me about Kashmir”. (Krishnamachari.) Both heads of state agreed to speak privately while the advisors were asked to wait outside. Ayub put to Nehru the question of reaching a settlement between him and Nehru while both were still holding their positions because “a settlement might become much more difficult later on”. (Krishnamachari.)

Nehru stressed on a realistic approach. He put forward his approach as “accepting the position as it was” with partial adjustments. Ayub “went on repeating” that the cease fire was an “ad-hoc” position brought on by military conflict. (Krishnamachari.) In regard to Kashmir, the MEA XE "MEA" “Kashmir Unit” has a copy of a draft agreement of some sort based on distribution of areas with territory above Chenab and Chandar-Bhaga excluding Kashmir Valley to be with Pakistan XE "Pakistan" ; Kashmir Valley including Kargil as semi-independent areas with Joint administration by India XE "India" and Pakistan for five years; at the end of five years there may be no plebiscite if there is mutual consent between India and Pakistan. It is unclear as to what the source point of this draft is.

Chinese Air Threat after 1962The report by Mountbatten gives a stark picture of overwhelming Chinese offensive capability in softening India before any negotiations. The talks between Prime Minister and Mountbatten in 1963 reveal that there was an assessment that Chinese MIG-19s could air raid on an “axis nearer to Delhi with a view to causing uneasiness in the capital and bringing pressure on the Government to negotiate on Chinese terms”. (Krishnamachari, Subject File 27, 1963.)

BOOK EXCERPT "The Nation Declassified" Five declassified secrets reveal India’s moves with global superpowers during the Cold WarA new book examines files no longer classified as top secret.

Emergency and Cold WarBoth US and USSR extended support and understanding to Indira Gandhi during the Emergency period. USSR did so because their leadership had developed a sort of personal bond with her and her advisers as well as her direction of policy whereas US could do very little and also India did not quite interest them in this decade of détente as much as it had during 1962-63 when cold war was still in the phase of direct confrontation between the two superpowers.

In talks with Kissinger XE "Kissinger" , the “Emergency” was explained by Indian officials as aimed at extra constitutional challenge “by a motley group of reactionary elements belonging to extreme left and right including communal and sectarian elements”. (MEA, FM-US visit, 1976.) State Department XE "State Department" Officials even acknowledged that economic growth had been good even after announcement of Emergency.

Records of discussions tell us of a meeting between DP Dhar XE "DP Dhar" and Soviet Foreign Minister Gromyko XE "Gromyko" at Moscow XE "Moscow" on 10 February 1975. (MEA, Indo Soviet Relations, 1975.) DP Dhar XE "Dhar" explained internal politics in India XE "India" wherein “neo-fascist and reactionary groups” were taking political advantage of the economic situation. All right wing strands had joined the Jayaprakash Narayan movement. He said that the PM was confident about the elections which were to be held in a year’s time.

Discussions between Kewal Singh XE "Kewal Singh" and Firyubin on November 25 touched upon the domestic situation in India on the declaration of Emergency, XE "Emergency" which included detaining of “some leaders indulging in anti-patriotic activities”. (MEA, Indo-Soviet Consultation, 1975.) According to the brief, the Soviets were given the explanation that Emergency had “reinvigorated national discipline, enthusiasm and devotion to duty”. (MEA, 1975.) It had also discredited and exposed the “extreme right and extreme left”.

The Foreign Secretary stated that the Emergency had prevented a situation such as that in Bangladesh XE "Bangladesh" from coming about in India. The Government had used Emergency measures to consolidate and strengthen the socialist policies within the 20-point economic agenda. Kewal Singh described the Emergency as “a very courageous decision by the Prime Minister XE "Prime Minister" ”. (MEA, 1975.)

Firyubin conveyed “whole-hearted support” to the Indian Government and “the real meaning of democracy means that government should work for the interest of the people…that kind of democracy was real democracy”. Firyubin also added that “we highly appreciate her courage”. (MEA, Indo-Soviet Consultation, 1975.) In the garb of democracy, leaders were engaging in undemocratic activities and undermining democracy and “the (Emergency) measures taken by your Prime Minister are a bright chapter in the history XE "history" of India”. (MEA, Indo-Soviet Consultation.) He described the Jana Sangh as a fascist group.

PM Morarji Desai’s visit to the Soviet UnionIn his meeting with LI Brezhnev XE "Brezhnev" at the Kremlin on June 12, 1979, Morarji Desai began with China XE "China" , and criticised Nehru XE "Nehru" as having “made a mistake of recognising in 1950 Chinese suzerainty over Tibet”. (Record of Discussions, 1979.) Brezhnev thought that India XE "India" must be prepared defensively as “there may be an unpleasant surprise in store”. (Record of Discussions, 1979.)

BOOK EXCERPT "The Nation Declassified" Five declassified secrets reveal India’s moves with global superpowers during the Cold WarA new book examines files no longer classified as top secret.

Chinese Air Threat after 1962The report by Mountbatten gives a stark picture of overwhelming Chinese offensive capability in softening India before any negotiations. The talks between Prime Minister and Mountbatten in 1963 reveal that there was an assessment that Chinese MIG-19s could air raid on an “axis nearer to Delhi with a view to causing uneasiness in the capital and bringing pressure on the Government to negotiate on Chinese terms”. (Krishnamachari, Subject File 27, 1963.)

Emergency and Cold WarBoth US and USSR extended support and understanding to Indira Gandhi during the Emergency period. USSR did so because their leadership had developed a sort of personal bond with her and her advisers as well as her direction of policy whereas US could do very little and also India did not quite interest them in this decade of détente as much as it had during 1962-63 when cold war was still in the phase of direct confrontation between the two superpowers.

In talks with Kissinger XE "Kissinger" , the “Emergency” was explained by Indian officials as aimed at extra constitutional challenge “by a motley group of reactionary elements belonging to extreme left and right including communal and sectarian elements”. (MEA, FM-US visit, 1976.) State Department XE "State Department" Officials even acknowledged that economic growth had been good even after announcement of Emergency.

Records of discussions tell us of a meeting between DP Dhar XE "DP Dhar" and Soviet Foreign Minister Gromyko XE "Gromyko" at Moscow XE "Moscow" on 10 February 1975. (MEA, Indo Soviet Relations, 1975.) DP Dhar XE "Dhar" explained internal politics in India XE "India" wherein “neo-fascist and reactionary groups” were taking political advantage of the economic situation. All right wing strands had joined the Jayaprakash Narayan movement. He said that the PM was confident about the elections which were to be held in a year’s time.

Discussions between Kewal Singh XE "Kewal Singh" and Firyubin on November 25 touched upon the domestic situation in India on the declaration of Emergency, XE "Emergency" which included detaining of “some leaders indulging in anti-patriotic activities”. (MEA, Indo-Soviet Consultation, 1975.) According to the brief, the Soviets were given the explanation that Emergency had “reinvigorated national discipline, enthusiasm and devotion to duty”. (MEA, 1975.) It had also discredited and exposed the “extreme right and extreme left”.

BOOK EXCERPT "The Nation Declassified" Five declassified secrets reveal India’s moves with global superpowers during the Cold WarA new book examines files no longer classified as top secret.

Discussions between Kewal Singh XE "Kewal Singh" and Firyubin on November 25 touched upon the domestic situation in India on the declaration of Emergency, XE "Emergency" which included detaining of “some leaders indulging in anti-patriotic activities”. (MEA, Indo-Soviet Consultation, 1975.) According to the brief, the Soviets were given the explanation that Emergency had “reinvigorated national discipline, enthusiasm and devotion to duty”. (MEA, 1975.) It had also discredited and exposed the “extreme right and extreme left”.

The Foreign Secretary stated that the Emergency had prevented a situation such as that in Bangladesh XE "Bangladesh" from coming about in India. The Government had used Emergency measures to consolidate and strengthen the socialist policies within the 20-point economic agenda. Kewal Singh described the Emergency as “a very courageous decision by the Prime Minister XE "Prime Minister" ”. (MEA, 1975.)

Firyubin conveyed “whole-hearted support” to the Indian Government and “the real meaning of democracy means that government should work for the interest of the people…that kind of democracy was real democracy”. Firyubin also added that “we highly appreciate her courage”. (MEA, Indo-Soviet Consultation, 1975.) In the garb of democracy, leaders were engaging in undemocratic activities and undermining democracy and “the (Emergency) measures taken by your Prime Minister are a bright chapter in the history XE "history" of India”. (MEA, Indo-Soviet Consultation.) He described the Jana Sangh as a fascist group.

PM Morarji Desai’s visit to the Soviet UnionIn his meeting with LI Brezhnev XE "Brezhnev" at the Kremlin on June 12, 1979, Morarji Desai began with China XE "China" , and criticised Nehru XE "Nehru" as having “made a mistake of recognising in 1950 Chinese suzerainty over Tibet”. (Record of Discussions, 1979.) Brezhnev thought that India XE "India" must be prepared defensively as “there may be an unpleasant surprise in store”. (Record of Discussions, 1979.)

Brezhnev conveyed to Desai that he had discussed India’s defence requirements XE "defense requirements" with Ustinov XE "Ustinov" (Soviet Minister of Defence) and recommended that 2 billion rouble worth of equipment be transferred to India. Desai brought up the issue of Pakistan XE "Pakistan" “trying to make nuclear XE "nuclear" weapons and carry out nuclear explosions” and he had raised this matter with the Pakistan President, who for his part denied any such plan. (Record of Discussions, 1979.)

BOOK EXCERPT "The Nation Declassified" Five declassified secrets reveal India’s moves with global superpowers during the Cold WarA new book examines files no longer classified as top secret.

At this point, Samoteikin spoke of the USSR XE "USSR" having “unconfirmed reports that they (Pakistan) are trying to build a uranium XE "uranium" enrichment XE "enrichment" plant but we have no report to say that they are attempting to have any bomb XE "bomb" ”. (Record of Discussions, 1979.) In response to the Indian PM’s talking about troubles in Iran XE "Iran" and fanatical elements in Pakistan and Afghanistan XE "Afghanistan" , Brezhnev said “the devil alone knows”. (Record of Discussions, 1979.)

The same day Desai held talks with Prime Minister XE "Prime Minister" AN Kosygin XE "Kosygin" at the Hall of Receptions. Desai placed the request for 200 tons of heavy water XE "heavy water" for RAPP XE "RAPP" . Kosygin replied that “I can immediately say yes….we will satisfy your request.” (Record of Discussions, 1979.) Kosygin remarked that these 200 tons requirement were in addition to the 205 tons already supplied to India XE "India" by the Soviet Union XE "Soviet Union" . Kosygin said that Soviet Union could supply 80 tons in 1980 and 50-60 tons every year thereafter. He informed Desai that he had accepted the Indian request for Soviet assistance in uranium XE "uranium" exploration, and a Soviet team was had already been selected for visiting India. Mention was also made of the Soviet rocket that had been used to launch Indian satellite XE "satellite" in June 1979.

Does #India’s Right Wing #Hindu Have Any Ideas? #Modi #BJPhttp://www.nytimes.com/2016/11/29/opinion/does-indias-right-wing-have-any-ideas.html?_r=1

What all these people had in common was an immense sense of grievance against an establishment they had vanquished electorally, but whose ideas still defined them. As the journalist Ashok Malik said while pointing out the right’s many victories, “Rather than confidently advance tomorrow’s agenda, the intellectual warriors of the right are still comfortable fighting the battles of yesterday.”

The targets of their rage are internationally familiar: the liberal elite, the news media, academia. But in India there is an added twist, a double sense of affront. It was not merely elitism that the New Right is reacting against, but an elitism that had the secret backing of the West, through its various newspapers, nongovernmental organizations and think tanks.

“So if you are an embattled Hindu, or even an atheist Indian,” Rajeev Srinivasan wrote in the right-wing magazine Swarajya, “you feel there is an entire constellation of powers with a negative intent arrayed against you, and that they have created a galaxy of sepoys, especially in media and academia.”

Historically, a “sepoy” was an Indian soldier serving in the British Army. It has become a favorite jibe on the right for an Anglicized liberal elite that was seen to be working against its own country.

At first glance it would seem that Shaurya Doval, who had organized the conclave, is part of such an elite. His father had been the director of India’s internal intelligence agency. He grew up in privilege, traveling the world. He has a business degree from the University of Chicago, and spent 10 years as a Wall Street banker.

But Mr. Doval, in fact, represents a new pain that globalization has wrought: the pain of cultural loss. In America, he had a revelation. “The eureka moment,” he told me, “came when I discovered the disconnect between what India really is, and who I am.”

It was true. The Indian elite had gloried in this disconnect; “foreigners in their own land,” Gandhi had called them in 1916. Even the modern state had in many ways been an extension of colonial power. Here, in Goa, it was as if the entire intellectual enterprise was suspect. Many felt that Western ideas like liberalism, secularism and freedom of speech had been used cynically against them to maintain the power of a cultural oligarchy. These exalted words were now terms of abuse.

But that did not mean the right wing had ideas of its own. Mr. Doval spoke of the need for “modern Indian state players” to make “a connect” with “India’s civilizational ethos.” He felt India had not been able to unlock the potential of its young, energetic population because the modern state represented too abrupt a break with the continuity of old India.

But was it really possible to reverse this process? Could modern India be remade to fit these sentimental longings? And didn’t all modernity represent a rupture with tradition?

The Nehru-Gandhi dynasty, which had, until recently, dominated politics since independence, was the supreme political achievement of an older English-speaking elite. Mr. Modi’s election was the crowning achievement of this new Indian elite.

The writer Patrick French, who was also at the Goa conclave, said of the right, “I’ve never ignored these people because I could see they had a political future.”

National Conference chief and former chief minister of Jammu and Kashmir Dr Farooq Abdullah today said the violence and loss of lives during the Srinagar bypoll "are a tragedy and a failure of the government of the day."

National Conference chief and former chief minister of Jammu and Kashmir Dr Farooq Abdullah, who is contesting the state by-elections from Srinagar, said that the violence and loss of lives during the bypolls in the state "are a tragedy and a failure of the government of the day. They could not provide security to the people, and further, it is the present dispensation which the people reject.""Why am I playing with fire? Is that not true? Are the stonepelters fighting for MP-ship or MLA-ship or some ministerial post? Wake up, before it is too late," said Abdullah, demanding that the youth deserved to be heard.Here are some excerpts from the explosive interview.

Rajdeep Sardesai: You said - Kashmiri youth are picking up guns for the freedom of Kashmir, and not for becoming legislators. As a senior statesman, shouldn't you be bridging the gap, but almost endorsing azadi and Kashmir is lost to India?Farooq Abdullah: Sometime ago, a Parliamentary delegation came to Kashmir under the leadership of the home minister. The delegation was told that we will talk to the youth, and all the stakeholders. Have they done so, in a single step, in the last two years? Why do you blame me?"

Q: Because you want votes, you are stirring the pot..?A: Wake up, wake up. The situation is quite bad, and don't tell me Pakistan is not a party to this problem. Whether you like it or not, you have to talk to Pakistan. If you want to beat the threat of the terrorists, then you better start talking now.Q: With what end result? All the talking, and yet terrorists are sent across border, and violence continues?A: Let us start mending our fences, and start controlling present problem. Let's not burn, let's talk to the youth, Hurriyat, other leaders and come to a solution.Q: How are talks are going to be different this time?A: You have 8 people dead, and God knows how many injured. How long will you keep on doing this? You think it's all law and order? Or, you think by development you can change the mind of people?"Q: Your critics will say that this is theatrics. When you are in power you speak differently, and now you seem to be catering to separatist sentiment?A: You are losing Kashmir. You better wake up, and start thinking on not a military solution, but a political way. And come down from your high horses...I am seeing a very bad situation. The youth is on boil. Which I have not seen before.The situation remains tense in the Kashmir valley a day after violence and a historic low voter turnout, at 7 per cent, marred bypolls in Srinagar.The Election Commission has postponed the bypolls in Anantnag Parliamentary constituency to May 25, 2016.The decision came after Chief Minister Mehbooba Mufti's brother Tasaduq Hussain Mufti, who is contesting a Parliamentary bypoll in Anantnag, appealed to the Election Commission to postpone his election.On Sunday, 8 civilians were killed and school set on fire in Shopian, in incidences of poll violence in Kashmir.

India has cut expenses toward lobbying in the US with a total payment of $120,000 to its registered lobbyist firm in the second quarter of 2017 - the first cut in nearly seven years. The disclosure has been made by BGR Government Affairs, which lobbied on behalf of India on issues relating to "bilateral US-India relations". According to the latest quarterly disclosure report filed with the US Senate, BGR has disclosed a total income of $120,000 from India toward "all lobbying related income from the client".

All lobbyist firms need to get registered in the US for undertaking any lobbying activities and file quarterly disclosures including about the payments received, specific issues for lobbying and the agencies approached by it.

During the second quarter of 2017 ended June 30, BGR lobbied on behalf of the Indian government at the US Senate, the US House of Representatives, the Department Commerce, the Department of State and the US Trade Representative.

Prior to the latest quarter, BGR's quarterly lobbying income from the Indian government stood unchanged at $180,000 since the fourth quarter of 2010. Before that, the Indian government had paid BGR $60,000 in the third quarter of 2010 and less than $5,000 in the second quarter of that year, according to the disclosure reports filed over the years.

The latest disclosure report did not cite any reason for the decline in the quarterly payment to $120,000. The highest quarterly amount so far has been recorded in the fourth quarter of 2009 when BGR was paid $200,000, as per an analysis of all disclosure reports filed by it.

While the "specific lobbying issue" disclosed by BGR for Indian government has been "bilateral US-India relations" for many quarters now, the firm also used to lobby "issues related to the civil nuclear agreement" between the US and India till 2009.

BGR began lobbying in the US on behalf of the Indian government in late 2005. In its registration disclosure filed in October 2005, BGR had said it has been mandated to "provide guidance and counsel with regard to issues impacting bilateral relations between the United States and the Republic of India".

Subsequently, in its year-end disclosure report for 2005, when BGR was paid a total of $240,000, the lobbyist disclosed that it "provided guidance and counsel with regard to issues impacting bilateral relations between the US and the Republic of India, including a potential civil nuclear agreement".

Issues on bilateral relationship and civil nuclear agreement continued to be listed as "specific lobbying issues" in the disclosure reports for the years 2006-2009, after which the disclosed lobbying area has been limited to 'bilateral US-India relationship'.

Since 2005-end when BGR began lobbying in the US on behalf of the Indian government, it has been paid a total of $8 million (approximately Rs. 50 crore at the current exchange rate).

just as development aid had unexpected and significant consequences for India, Engerman argues that the aid policies of the United States and Soviet Union were both primarily defined by the India experience. Essentially both Washington and Moscow learned about the politics and economics of development aid – the potential and the pitfalls – from the process of dealing with India.

This was reflected in the changing nature of U.S. aid to India. U.S. assistance began with community development programs in the early 1950s, when technical assistance trainers were sent to Indian villages.

India was the largest recipient of U.S. community development assistance during this time. But while big on rhetoric and goodwill, it was accompanied by relatively little financial assistance (just 6 cents per beneficiary per year).

In the early 1960s, India asked the Kennedy Administration for funds that were unlinked to projects in order to finance imports, so called “free money.” But instead, as the Cold War heated up, aid became increasingly linked to outcomes and was subject to narrower U.S. conditions, such as on family planning, food aid, and reduced Indian criticism of the Vietnam War.

In other words, project aid initially meant to develop the Indian economy gradually evolved to programme aid whose express purpose was to shape Indian policy. The changing nature of U.S. assistance increased donor leverage and therefore presented new challenges to the Indian policy-making community. Among other consequences, it helped ensure that very little technological transfer took place.

Similarly, the Soviet approach to economic cooperation in the developing world began with India in the 1950s and was largely driven by Indian conditions. Over time, it eventually assumed a very different character from U.S. aid.

During the visit of Soviet leader Nikolai Khrushchev to India, the U.S.S.R. pulled off something of a coup with an agreement to support a steel plant in Bhilai in Madhya Pradesh. This was the first plan of Soviet assistance outside the Communist Bloc, and represented a move away from the relative economic isolationism of the Stalin years.

Ironically, India had sought Japanese and West German assistance before turning to the Soviets, and even the Soviet project at Bhilai benefited from components and services provided by Western companies.

The shock of the Bhilai announcement forced the United States to increase its support for India, but the Soviet Union soon ran into problems as its own economic growth began to slow. Gradually, Moscow discovered that it had an advantage over the United States in being more open to industrial licensing, which meant that military assistance to India came to predominate.

This was accelerated by the U.S. cut-off of military support during the 1965 India-Pakistan War. Yet, over time, as the technological gap between the United States and Soviet Union widened, India found that the over-dependence on Soviet military assistance put it at a disadvantage.

India is eager for development, but the US is not the one that can provide New Delhi with the atmosphere that its development needs. The decision of the US administration to postpone the US-India "2+2 dialogue", scheduled for July 6, is a disappointment to India, and the second such time that this supposedly important dialogue between the two countries' foreign and defense ministers has been postponed.

Indian media speculated that the latest postponement was due to US Secretary of State Mike Pompeo's visit to North Korea to discuss denuclearization plans. Divergences over other issues between the US and India were also cited as a possible reason.

The US has been generous about its fondness for India in rhetoric. But whether the fondness is what Indians need the most, or if the value is worth the price, remains undetermined.

Of course, the United States and India do have common interests. Otherwise, there would be no Indo-Pacific strategy at all. However, any benefits from this strategy may be greatly outweighed by the costs to India.

The subtext of this strategy of the United States is that it hopes India can play an essential role in balancing the rise of China. Does India really want to play the role that the US expects? Don't forget that this strategy has a strong military stance against China. At the very least, it is re-dividing Asia-Pacific with Cold War thinking.

It is understandable that India wants to keep its sphere of influence as an emerging power, but this shouldn't come at the cost of its domestic development. Indulging in the game of military balance will only consume India's strength.

India needs to be aware that without paying heed to Indian concerns, the US' strategy is hampering, not aiding, India's domestic development. Rather than falling victim to the US' purpose of containing China's rise, it is better for India to look to China for ways of self-development. What India can learn from China is that its ability to stand on its own feet will determine its place in Asia and the world.

India is currently at a critical juncture in its development. Can India's economy achieve greater development in the next five to 10 years? The number one challenge is how India can lay the foundation for manufacturing and infrastructure to fully enter the global production chain.

From this perspective, it is China, not the United States, that can provide more support and knowledge to India. If India follows the US strategy step by step, it will lose future opportunities to cooperate with China and many other neighboring countries. India should be able to understand the situation.

For the moment 2+2 equals zero, at least when it comes to Indo-US ties. The 2+2 dialogue, a reference to a summit that would involve the foreign and defence ministers of India and their US counterparts, was postponed on Wednesday for the third time. Washington said it had to push the meetings back due to “unavoidable reasons” and that it would work with India to figure out a new date for the dialogue.

The inaugural meeting was originally slated for July 6, in Washington, DC. Now aides from both sides will have to carve out another spot on their calendars for the the ministers to meet. The ostensible reason is that a summit between US President Donald Trump and Russian President Vladimir Putin is also expected in early July for which the Americans will presumably need all hands on deck.

But the timing of the postponement also suggests a serious drift in ties between Washington and New Delhi.

India has just announced retaliatory tarrifs after the US unilaterally imposed its own.Unnamed State Department officials in the US told reporters they expect allies to cut trade with Iran down to “zero”.India seems set to buy the S-400 air defence system from Russia, which would attract US sanctions.US ambassador to the UN Nikki Haley, who is visiting India, told reporters she spoke to Prime Minister Narendra Modi about getting India to cut down its oil imports from Iran.This is the third time that the 2+2 dialogue has been postponed in the last six months. When the dialogue was announced, after Modi’s visit to the US in June 2017, it was meant to be a sign of growing ties with India. The belief was the New Delhi and Washington were both agreed on the idea that India would act as a counterweight to China in the Indo-Pacific region. Modi seemed more willing than previous Indian leaders to embrace this role, especially because it came around the same time when Indo-China relations were particularly tense because of the Doklam standoff.

Much has changed since then. On the Indian side, Modi seems to have recalculated his position. Once the Doklam incident was resolved, New Delhi has steadily taken steps to reduce tensions with China, including holding an informal summit with President Xi Jinping in Wuhan in May. India still seems prepared to play a major role in the Indo-Pacific region, but it pointedly does not want this to be seen as an anti-China position – not least because there is nothing to be gained from tense situations with its bigger northern neighbour in an election year.

In more dour news for Iran, India (the world’s fourth largest oil importer) is planning to cut oil imports from the embattled OPEC member. India’s oil ministry has asked refiners to prepare for a ‘drastic reduction or zero’ imports of Iranian oil from November, Reuters said on Thursday, citing two industry sources.

The news comes as Tehran remains defiant over impending U.S. sanctions renewal and just days after India indicated it would push back against pressure from Washington to halt Iranian oil imports, stating that it did not recognize sanctions the U.S. has threatened to impose on countries that continue to buy Iranian oil after November 4.

"India does not recognize unilateral sanctions, but only sanctions by the United Nations," Sunjay Sudhir, joint secretary for international cooperation at India's petroleum ministry, told CNN earlier when asked whether India would reduce oil imports from Iran. After China, India is the largest buyer of Iranian crude oil.

President Trump said on Tuesday that the U.S. would level sanctions on countries that not did not cut Iranian oil imports.

Though India made an initial defiant stand, it simply can’t afford to alienate Washington since it has to safeguard its exposure to the U.S. financial system, a powerful tool that the U.S. can wield as it pleases since the dollar is the world’s reserve currency. This allows Washington to level crippling sanctions on a wide range of countries all the way from Russia to Venezuela to Iran and anybody else that any sitting U.S. president sees fit to punish.

This economic weapon is also why Beijing is working feverishly to supplement or replace the U.S. dollar as the world’s reserve currency. In September, John Hardy, the head of FX strategy at Saxo Bank said China was “eyeing the benefits of having its own currency play a larger role and to supplant the USD's role in global trade. The initial focus is on the global oil trade, where it has announced the intention of buying oil in yuan and allowing trade partners to settle that yuan in gold." He added that settling in gold is a clever move by Beijing as it provides oil-exporting countries with a greater degree of comfort.

#India’s foreign policy is up a creek without a paddle, especially in its #SouthAsia neighborhood due to reckless adventurism. #Modi has abandoned non-aligned movement and antagonized #China and #Russia in its pursuit of alliance with #America, #Trump.

The BJP government’s denseness has ended up antagonising both Russia and China. Nothing typified this more than Russia holding antiterror exercises with Pakistan in DRUZBA-2017. Similarly, rather than taking a nuanced position, the ill-conceived boycott of the Belt and Road Forum in Beijing in 2017 invited the wrath of China via the Doklam standoff. Notwithstanding government claims, the withdrawal from Doklam was sequential — India first, then China — rather than simultaneous. The sequel was that the Prime Minister had to travel to Wuhan and Sochi to effectively pay ‘court’ to Presidents Xi Jinping and Vladimir Putin, respectively.

The worst casualty has, however, been India’s neighbourhood. In the past four years, the BJP government has swung from the sublime to the ridiculous on Pakistan, blockaded Nepal for not declaring itself as a Hindu Rashtra, lost Sri Lanka to the Chinese, been belittled by the Maldives and even Seychelles. Europe, Africa, Latin and South America have fallen off the map.

The list is interminable. The BJP government’s denseness has ended up antagonising both Russia and China. Nothing typified this more than Russia holding antiterror exercises with Pakistan in DRUZBA-2017. Similarly, rather than taking a nuanced position, the ill-conceived boycott of the Belt and Road Forum in Beijing in 2017 invited the wrath of China via the Doklam standoff. Notwithstanding government claims, the withdrawal from Doklam was sequential — India first, then China — rather than simultaneous. The sequel was that the Prime Minister had to travel to Wuhan and Sochi to effectively pay ‘court’ to Presidents Xi Jinping and Vladimir Putin, respectively.

The worst casualty has, however, been India’s neighbourhood. In the past four years, the BJP government has swung from the sublime to the ridiculous on Pakistan, blockaded Nepal for not declaring itself as a Hindu Rashtra, lost Sri Lanka to the Chinese, been belittled by the Maldives and even Seychelles. Europe, Africa, Latin and South America have fallen off the map.

The list is interminable. India’s foreign policy is up a creek without a paddle.

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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